Projects

KMRD reduced workers compensation costs by 23%/$369,460 in first year.

A Better Story

KMRD convinced the carriers past losses are not a good predictor of the future.

Better Loss Picture

KMRD implemeted immediate changes to improve average losses.

Immediate Savings

KMRD’s efforts improved pricing by 23%.

The Issues

Our analysis of the loss picture indicated the existing workers compensation insurance program may have been overpriced by as much as 25%.

We identified a number of claims which subrogation could have been pursued but was neglected. When subrogation was pursued efforts failed due to weak contractual risk transfer language in their supplier’s contracts.

The client was not happy with their claims service. Our initial review identified $700K in losses which could have been lowered through an aggressive pursuit of Supersedeas funds. In the State they were operating, an employer or carrier may seek reimbursement / payment from the State Workers’ Compensation Board if it was later determined compensation should have been terminated at an earlier date.

Our Response

We prepared a summary of losses which clearly revealed the insured’s average losses as compared to its premiums and exposure basis. This triangulation process revealed some surprising trends.

We categorized losses by location so the client understood where their frequency and severity of claims were coming from.

We investigated “large losses” (severity). We investigated circumstances and subsequent prevention measures of each large loss. Preventative measures and initiatives were documented and tracked in our RMI/RMA process.

We opened lines of communication by pursuing and challenging the carrier’s claims representatives on all large losses, while asking a few simple questions. The carrier’s response to our initial inquiries confirmed our diagnosis. The claims person had not recently reviewed many of the claims and the logic in the reserving process required a total overhaul.

We revamped their contractual risk transfer program to include firm insurance requirements, primary-noncontributory additional insured status and intermediate hold harmless language at a minimum.

The Results

Significant Reduction in Loss Picture – Our reserving, subrogation and supersedeas fund discussions with the existing carrier triggered a re-evaluation of the reserving logic yielding a significant reduction in the 5-year loss picture.

Convincing Story – We developed a well-documented story positioning the historical loss information as being inaccurate and therefore the existing pricing structure was too high. Our claims specialists convinced the insurance community past losses were not a good predictor of the future because of the impact of loss control and claims management changes along with KMRD’s support with implementation / execution.

Project summary

We analyzed their loss history identified some areas of opportunity to improve their situation and built an argument for lower pricing. It worked to the tune of 23% / $370K. A great example of a team effort executing our standard process!

Project Team

Robert DietzelProject Lead

Brian HeunProject Lead

Jenean MeierClaims Advocate

Steve MacauleyRisk Manager

Project Skills

Claims Management

Negotiaton

Process Improvement

Risk Identification

Strategy

Testimonial

“"We tried large brokers in the past. KMRD's initial assessment of our situation was compelling so we elected to move forward with them. They delivered on their promises and then some. We are very happy we chose them as a partner."”